I count three downgrades today, in all, from Goldman Sachs, Sanford Bernstein, and Canaccord Genuity.

As I wrote following that announcement, the bears warned that the worst may not yet be over in terms of the deterioration of the existing business, and that the partnership to develop phones with Microsoft (MSFT) still carries risk.

That’s generally the viewpoint of today’s actions as well. I’ll get to the Goldman and Bernstein notes in a moment.

Mike Walkley at Canaccord Genuity cut his rating to Hold from Buy and cut his price target to $8 from $11, writing that he is “increasingly concerned about sales for Nokia’s Symbian devices during the transition period.”

The vaunted Nokia distribution channel has in fact broken down in China, the company indicated, and the head of operations there has been let go. “Nokia indicated it had mismanaged inventory levels in China and has fired and replaced the head of its China distribution operations.”

Walkley cut his 2011 EPS estimate to $20 cents from 54 cents, and cut his 2012 EPS estimate to 28 cents from 83 cents, but he still thinks Nokia’s phones based on Windows Phone could become a viable third platform, after Apple’s (AAPL) iOS, and Google’s (GOOG) Android, and he models a profit of 83 cents in 2013, on a rebound in sales to €44.9 billion from a likely €39.7 billion in 2012.

Bernstein’s Pierre Ferragu, meanwhile, cut his rating from Market Perform to Underperform, with a $4 target price on the American Depository Receipts, down from $7.33 previously. His target price on Nokia’s ordinary shares goes to €3 from a prior €5.50.

Ferragu notes that he had upgraded the stock on March 11th, when there were 13 Sell ratings on the Street, thinking that investor expectations were low enough to offer some upside on the shares. But yesterday’s cut means the “worst case” scenario that he had imagined is, in fact, crystalizing.

The introduction of the Windows-based phone “will be challenging,” he thinks, “given the likely loss of traction and visibility of the Nokia brand, as well as the speed at which the opportunity for a third ecosystem to emerge is vanishing.”

In fact, Ferragu thinks something is happening to Nokia akin to what befell Motorola back when it lost its grip on the number two spot in the phone market:

This new guidance is to us a strong indication that the company is falling into the Motorola-type scenario we have been worried about for some time. We expect Nokia’s smartphone and mobile phone shipments to shrink sequentially in the second quarter, leading to market shares of 19% and 30%, down 19 pts and 5 pts year on year. This precipitous acceleration of market share loss has two major implications. Nokia is now losing visibility in Europe. The brand lost its first spot to Samsung in the first quarter and our recent store visits indicated a dramatic loss of visibility for Nokia: In some stores, we couldn’t see Nokia phones on display above knee level. Nokia’s emerging market share is not well protected. It now seems clear that Nokia’s more stable position in emerging markets and especially in China was artificial. Management advocated that major inventory build-ups artificially increased shipment volumes in the last quarters. We now believe Nokia will face pressure in these markets similar to what it has been experiencing in Europe.

Boddy writes that his prior convocation that the stock offered upside if new Windows phones succeeded failed to anticipate how quickly the business would deteriorate.

“With Nokia unlikely to have a full Microsoft- based smartphone line-up across all price points before mid-2012, risks to revenues remain material, threatening Nokia’s ability to retain its distribution relationships and retail footprint when new products arrive.”

Boddy cut his EPs estimate for this year to 17 cents from a prior 53, and cut 2012′s estimate to a loss of 1 penny, versus a prior estimate of 70 cents per share.

And like Ferragu, he draws parallels with the old Motorola’s troubles when it lost its position in phones:

We believe the parallels between Nokia’s situation and Motorola in 2007/8 are becoming more similar. We still argue that Motorola’s position was more precarious, given its dependence on a slim number of high end ‘hit’ models for its profitability, a structurally unprofitable EM business and a weaker balance sheet, but a clear lesson from Motorola’s challenges (or, for that matter, Sony Ericsson’s) is that it is both difficult and time-consuming to rebuild distributor, retail and supplier confidence in your brand once market share has collapsed.

Things that were an advantage for Nokia, moreover, such as in-house manufacturing, may come to be a liability, Boddy believes. For one thing, of the company’s 59,000 employees in its handset operations, about half are based in developed markets. That might make it tough for the company to restructure if it wanted to shift resources to emerging markets where the upside is greater.

Posted on 01 June 2011

S.E.C. Case Stands Out Because It Stands Alone (NYT)
But [Fabrice] Tourre’s world would soon be turned upside down. In fall 2009, the S.E.C. issued him a Wells notice, a formal warning that he was likely to be named in a civil fraud suit for his role in the mortgage deals. Mr. Egol also received such a notice in 2010. In their Oct. 10 response to the S.E.C., Mr. Tourre’s lawyers, including Pamela Chepiga of Allen & Overy, made an argument that they have not emphasized publicly. They contended that “singling Mr. Tourre out for criticism regarding the content of this clearly collaborative effort is unreasonable.” These legal replies, which are not public, were provided to The New York Times by Nancy Cohen, an artist and filmmaker in New York also known as Nancy Koan, who says she found the materials in a laptop she had been given by a friend in 2006. The friend told her he had happened upon the laptop discarded in a garbage area in a downtown apartment building. E-mail messages for Mr. Tourre continued streaming into the device, but Ms. Cohen said she had ignored them until she heard Mr. Tourre’s name in news reports about the S.E.C. case. She then provided the material to The Times. Mr. Tourre’s lawyer did not respond to an inquiry for comment.

Did the NYT hack Fabrice Tourre’s email? (Reuters)
Felix Salmon: “Louise Story and Gretchen Morgenson have a long and rambling story about the court case against Goldman’s Fabrice Tourre, which is mainly interesting for how it was sourced…I’m sure this was extremely carefully formulated, but it does raise a lot of questions without answering them. Tourre’s name was splashed over the newspapers in April 2010, so it stands to reason that the NYT has had some kind of access to Tourre’s private, password-protected email account — not to mention archives going back at least to 2006 — for a good year at this point. I’d also guess that the NYT is going public with its source now because Tourre finally got around to changing his password, and the stream of emails then dried up.”

SAC Faces Probe of Biotech Trading (WSJ)
MedImmune shares jumped 18% on April 23, 2007, the day its takeover was announced. Trading was heavy before the announcement, driving shares up more than 50% over six weeks, suggesting that rumors of a deal may have reached traders ahead of the announcement. SAC significantly increased its holdings of MedImmune during the quarter prior to the one in which the deal was announced, according to public filings. SAC increased its holdings from 151,000 shares in the fourth quarter of 2006 to 796,000 shares in first quarter of 2007. It cut its holdings to 30,000 shares at the end of 2007′s second quarter, then reported that it sold the position completely, according to filings.

Greece nears IMF/EU deal, dismisses drachma talk (Reuters)
Greece should complete talks by the end of the week with inspectors from the EU and IMF on a medium-term budget plan plus a vital next slice of international aid, sources close to the negotiations said on Wednesday.

EU warns US to speed up bank reform (FT)
In a letter sent last week to US Treasury secretary Tim Geithner, Michel Barnier, the European commissioner in charge of financial markets, argued that Brussels was ahead of the US in several areas – including capital requirements for banks and limits on bonuses for financial executives. Mr Barnier urged the US to match European efforts. “The level playing field must be a reality, not an empty slogan,” he wrote in the May 27 letter, which was obtained by the Financial Times.

Irish lenders outline loss plans for bondholders (FT)
Three of Ireland’s lenders revealed plans to impose losses of up to 90 per cent on bondholders in attempts to make them shoulder some of the cost of recapitalising the country’s banks. Bank of Ireland said it would shortly announce a cash offer for €2.6bn ($3.7bn) of its subordinated debt, with discounts of either 80 per cent or 90 per cent depending on the type of bond. Two smaller lenders, Irish Life & Permanent and EBS, planned to impose similar losses on holders of about €1bn of debt.

Attorney General orders more episodes of the “The Wire”, or a movie (Reuters)
“I want to speak directly to Mr. Burns and Mr. Simon: Do another season of ‘The Wire’,” Holder said, drawing laughter and applause from the audience. “That’s actually at a minimum. … If you don’t do a season, do a movie. We’ve done HBO movies, this is a series that deserves a movie. I want another season or I want a movie. I have a lot of power Mr. Burns and Mr. Simon.”

Citigroup Close to China Securities Partnership Deal (WSJ)
Citigroup Inc. is close to an agreement with a partner in China to set up a joint-venture securities business that would give the New York bank a long-sought foothold in China’s domestic capital markets, according to people familiar with the situation. Citigroup is expected to sign a memorandum of understanding with Shanghai-based Orient Securities Company Ltd. as soon as Thursday morning China time.

EIB halts Glencore lending on governance concerns (Reuters)
The EIB, the European Union’s lending institution, provided in 2005 a $50 million loan to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore, to help pay for the modernisation of a copper smelter. But Mopani has since been accused by some non-governmental organisations — most recently by campaign groups in an open letter signed by a group of European parliamentarians — of tax evasion and of causing widespread pollution.

South Korea Probes Foreign Banks (WSJ)
Financial Supervisory Service Deputy Gov. Kim Yung-dae said at a briefing Tuesday that some foreign-bank branches in South Korea were handing over day-to-day trading operations involving money held in local accounts to a larger foreign branch or regional headquarters in places like Hong Kong and Singapore. Such outsourcing is illegal in South Korea…Mr. Kim said HSBC Holdings PLC and Crédit Agricole SA have already been sanctioned for improper outsourcing of operations involving derivatives…A person familiar with the situation said Royal Bank of Scotland Group PLC may also be sanctioned for engaging in similar activity, with the FSS likely to decide on the matter in June or July.

Sovereign ratings still relevant – but mostly when they go negative (FT Alphaville)
Bond markets still react to sovereign ratings announcements, though they tend to react more when the rating agencies say something negative. That’s the conclusion of a new working paper from the European Central Bank, which looked at changes in yields and CDS spreads after rating actions from Standard & Poor’s, Moody’s and Fitch on two dozen European Union countries from 1995 on.

Lehman Veteran Is Back in Game (WSJ)
Mark Walsh is best known for the gigantic real-estate deals that backfired on Lehman Brothers Holdings Inc. before it collapsed in 2008. As the financial crisis recedes, the 52-year-old Mr. Walsh is mounting a low-key comeback at a new real-estate firm by leaning on connections made before the real-estate bubble burst. “Unfortunately, Mark has to live with the talk of having done a couple of bad deals, rather than people focusing on the overwhelming amount of good ones,” says New York real-estate developer Steven Witkoff.

Accuser was maid to wait (NYP)
A female manager at the ritzy Pierre hotel was suspended yesterday for shrugging off a room attendant who reported that an Egyptian business big shot had just sexually assaulted her in his room, the hotel revealed yesterday. The manager, whose name was not released, merely noted the maid’s shocking claims in a logbook — and never reported them to Pierre security, her own bosses or police, officials said.

ACLU wants porn to be allowed for South Carolina inmates (ABC)
The American Civil Liberties Union is pushing for porn at a detention center in Moncks Corner, South Carolina. The move came after reports surfaced that the facility only allowed inmates to read the Bible. But prison officials said that isn’t true and inmates have a wide variety of reading material at their disposal.

Posted on 24 May 2011

Shares of software vendor Salesforce.com (CRM) are up $3.45, or 2.4%, at $148.75 after Morgan Stanley’s Adam Holt this morning raised his rating on the stock to Overweight from Equal Weight, with a $200 price target, writing that workloads on “cloud” computing facilities, such as the company’s “Force.com” online platform, is going to rise 50% per annum, compounded, through the next three years, based on Morgan Stanley’s survey of 300 IT executives.

Usage of cloud-based applications will increase from 51% of companies today to 80%, Holt says the data show.

Salesforce should be the biggest beneficiary, Holt thinks, and he believes consensus estimates for the company don’t reflect the rate of growth, instead modeling something like 20% cloud industry growth.

Based on an expectation Salesforce will garner an increasing share of the “software-as-a-service” pie, not to mention “platform-as-a-service” business, Holt raised his estimates for the company for fiscal 2013 and 2014. He sees $2.17 billion in revenue for this year, the same as his prior estimate, but for 2013 he sees revenue of $2.57 billion, from a prior estimate of $2.53 billion, and for 2014, he sees revenue of $3.23 billion, up from $3.082 billion previously.

That should produce non-GAAP EPS next year of $1.90, rather than the $1.80 he’d previously expected, and EPS of $2.43 in 2014, rather than the $2.31 he’d previously modeled. Holt models Salesforce earning $1.32 this year.

Holt’s $200 target is based on a 47 multiple of his projected free cash flow per share of $4.11 next year, which he suggests is a 1.3 times growth multiple.

Posted on 24 May 2011

Shares of software vendor Salesforce.com (CRM) are up $3.45, or 2.4%, at $148.75 after Morgan Stanley’s Adam Holt this morning raised his rating on the stock to Overweight from Equal Weight, with a $200 price target, writing that workloads on “cloud” computing facilities, such as the company’s “Force.com” online platform, is going to rise 50% per annum, compounded, through the next three years, based on Morgan Stanley’s survey of 300 IT executives.

Usage of cloud-based applications will increase from 51% of companies today to 80%, Holt says the data show.

Salesforce should be the biggest beneficiary, Holt thinks, and he believes consensus estimates for the company don’t reflect the rate of growth, instead modeling something like 20% cloud industry growth.

Based on an expectation Salesforce will garner an increasing share of the “software-as-a-service” pie, not to mention “platform-as-a-service” business, Holt raised his estimates for the company for fiscal 2013 and 2014. He sees $2.17 billion in revenue for this year, the same as his prior estimate, but for 2013 he sees revenue of $2.57 billion, from a prior estimate of $2.53 billion, and for 2014, he sees revenue of $3.23 billion, up from $3.082 billion previously.

That should produce non-GAAP EPS next year of $1.90, rather than the $1.80 he’d previously expected, and EPS of $2.43 in 2014, rather than the $2.31 he’d previously modeled. Holt models Salesforce earning $1.32 this year.

Holt’s $200 target is based on a 47 multiple of his projected free cash flow per share of $4.11 next year, which he suggests is a 1.3 times growth multiple.

Posted on 24 May 2011

Shares of software vendor Salesforce.com (CRM) are up $3.45, or 2.4%, at $148.75 after Morgan Stanley’s Adam Holt this morning raised his rating on the stock to Overweight from Equal Weight, with a $200 price target, writing that workloads on “cloud” computing facilities, such as the company’s “Force.com” online platform, is going to rise 50% per annum, compounded, through the next three years, based on Morgan Stanley’s survey of 300 IT executives.

Usage of cloud-based applications will increase from 51% of companies today to 80%, Holt says the data show.

Salesforce should be the biggest beneficiary, Holt thinks, and he believes consensus estimates for the company don’t reflect the rate of growth, instead modeling something like 20% cloud industry growth.

Based on an expectation Salesforce will garner an increasing share of the “software-as-a-service” pie, not to mention “platform-as-a-service” business, Holt raised his estimates for the company for fiscal 2013 and 2014. He sees $2.17 billion in revenue for this year, the same as his prior estimate, but for 2013 he sees revenue of $2.57 billion, from a prior estimate of $2.53 billion, and for 2014, he sees revenue of $3.23 billion, up from $3.082 billion previously.

That should produce non-GAAP EPS next year of $1.90, rather than the $1.80 he’d previously expected, and EPS of $2.43 in 2014, rather than the $2.31 he’d previously modeled. Holt models Salesforce earning $1.32 this year.

Holt’s $200 target is based on a 47 multiple of his projected free cash flow per share of $4.11 next year, which he suggests is a 1.3 times growth multiple.

Posted on 24 May 2011

Morgan Stanley’s Katy Huberty today cut her rating on shares of Hewlett-Packard (HPQ) to Equal Weight from a prior Overweight, writing that the shift to “cloud” computing, where more units of servers are sold into hosted data centers, rather than enterprise offices, means a 1% decline in server units sold over the next three years.

That’s bad for both HP, and Dell (DELL), because the trend in hosted data centers is to buy from “lower cost Asian vendors,” a trend she expects to continue.

Huberty cut her estimates: she was previously modeling 3.2% revenue growth for HP in the fiscal year ending October of 2012, but now that’s looking like just 2.9%. Similarly, she cut her 2013 estimate to $133.1 billion, down from $135.6 billion previously, for growth of just 1.6%, versus a prior 1.9% estimate.

HP will now have higher levels of operating expense “distributed across a slow growth revenue base,” writes Huberty. In addition to the server shift, HP has to contend with challenges to PCs from tablets, less IT services business as companies simply move everything to the cloud, and a general decline in pages printed by enterprise customers.

Huberty suggests the company would, “offer investors a better revenue growth and margin story without PCs,” with perhaps $44 per share in value for the enterprise business on a standalone basis. And she thinks the stock won’t work until HP outlines how it will “limit downside risk in PCs and printers.”

Huberty’s “base case” on the stock is a $42 share price, for an 8 times forward P/E on her fiscal 2012 estimate of $5.30.

Posted on 18 May 2011

These go to 11: The downgrade party continues on Hewlett-Packard (HPQ), with JP Morgan’s Mark Moskowitz overnight cutting his rating on the shares to Neutral from Overweight, and cutting his price target to $42 from $55. That follows the ten downgrades I reported yesterday.

Yesterday’s cut in outlook is likely not the last for the company, he argues, given that the problems in the services business were unforeseen.

We believe investors had been expecting continued weakness in consumer PCs and potential supply chain disruptions due to the Japan disasters, but the elongating services overhaul and the second guidance reset in a row stand to depress investor sentiment in the near to mid term, weighing on the P/E multiple.

Moskowitz also thinks management has some explaining to do:

Beyond the new CEO transition, we think that investors are disappointed with three dynamics of unfriendly shareholder activity. First, there were the relatively expensive acquisition prices for ArcSight and 3PAR last summer. Second, there is the September 28 analyst meeting and its message of F2011 guidance being a “lay-up.” Third, there is the series of two-consecutive resets to numbers (Feb. 22 and May 17), when the company appeared resolute and adamant on February 22 that the revised outlook at the time was very conservative.

(I would note that Hewlett-Packard (HPQ) shares continue to trade down this morning, following a raft of downgrades yesterday. The stock is currently off 67 cents, almost 2%, at $36.24.)

No upgrades so far this morning, that I can see, but estimates and price targets are going up all around, but there is still a substantial caution about whether Dell can maintain its operating profit margin, given that it was margin that allowed the company to beat earnings last night even as it missed revenue estimates:

Kevin Hunt, Auriga: Reiterates a Buy rating, and a $25 price target. Hunt raised his full-year EPS estimate to $1.86 from $1.65, leaving essentially unchanged his EPS estimate of $64.7 billion. The question is margin, he suggests, and what to believe: “Dell increased its full year operating income guidance to a range of 12-18% y/y growth from a prior view of 6-12%. While that is impressive growth, it is far short of the 74% y/y growth just posted by Dell in the first quarter, and implies a significant deceleration in margins as the year progresses, with negative profit growth later in the year, at a time when revenue is being guided upward.” Probably just being conservative, says Hunt, but it’s also possible PC pricing gets more “aggressive” this year, or component pricing rises. “So some caution does appear prudent.”

Ben Reitzes, Barclays Capital: Reiterates an Equal Weight rating on the shares, while raising his price target to $17 from $15. “We continue to believe Dell margins may have peaked,” he writes. Problem is, a wind-down of the corporate PC refresh cycle means Dell “will need to adjust pricing a bit to provide more balance,” given that revenue underwhelming in each segment in the quarter, with desktop revenue down 8% and notebook revenue of $4.7 billion slightly less than expected. Server and networking revenue of $1.97 billion was also light, as was storage revenue and software and peripherals. Services was a bright spot and it “seems like that business is on solid footing.” Reitzes raised his year EPS estimate to $1.90 from $1.70.

Brian Marshall, Gleacher & Co.: Reiterates a Neutral rating, while raising his price target to $16 from $15, though he’s not convinced Dell can maintain its operating margin improvement. “Management’s FY12 operating income guidance is for growth of 12-18% Y/Y. This implies an operating margin outlook of 7.0% at the midpoint of guidance (i.e., a material decline over the next three quarters) […] There must be a decelerating operating margin trajectory (i.e., a 220bp decline from the most recent quarter).” Marshall raised his year EPS estimate to $1.74 from $1.65 previously, on revenue of $63.5 billion, up slightly.

Shaw Wu, Sterne Agee: Reiterates a Neutral rating and a $15 price target, while raising his fiscal year ESP estimate to $2 from a prior $1.70. However, his concerns are not allayed: “we remain concerned with the company’s longer-term fundamental position and believe the company needs to take more aggressive steps to reinvent itself. In our view, the company faces formidable competitors Apple (AAPL), HP, Acer, Toshiba, and Lenovo in its core PC business, and HP, IBM (IBM), Cisco Systems (CSCO), and Oracle (ORCL) in the enterprise business.”

Richard Kugele, Needham & Co.: Reiterates a Hold rating, while raising his year estimate for EPS to $1.88, leaving his revenue more or less unchanged at $64.9 billion. “We believe that to warrant further appreciation in the stock, the street would need to: 1) suspend its negative view on tablets, 2) assume a near-term recovery in the consumer PC market, and 3) believe Dell will be able to maintain or expand margins even in the pending less favorable component environment (all of which we see as unlikely at this time).”

Keith Bachman, BMO Capital Markets: Reiterates a Market Perform rating, while raising his price target to $19 from $18. “Given weak stock price performance by HPQ, and strong stock performance by IBM (IBM), we believe that investors will consider and indeed put some new money to work in Dell,” writes Bachmn, though he’s not convinced there’s enough upside to raise his rating on the shares.

Posted on 16 May 2011

UBS analyst Arvind Ramnani today raised his rating on shares of Accenture (ACN) to Buy from Neutral, with a $63 price target, up from $54 previously, arguing that clients have “become less price-sensitive,” and will to pay a premium for Accenture’s services.

Ramnani thinks Accenture can take share of market as clients start to focus more on “growing” their business, rather than just running it.

“We believe that Accenture’s premier franchise, global footprint, and deep long standing client relationships are helping the company increase market share, as decision makers are increasingly working with vendors that have the best delivery capabilities.”

Ramnani raised his 2011 estimates for the fiscal year ending this August to $24.7 billion from $24.2 billion, and to $3.27 in EPS from a prior $3.20, on increased share, and raised his 2012 estimates as well. Analysts have been modeling $24.6 billion and $3.26.

Posted on 13 May 2011

Shares of Nvidia (NVDA) are down $1.42, or 7%, at $19.08, and were as low as $18.67 at one point this morning, after the company last night offered a better-than-expected fiscal Q1 report and Q2 outlook.

Analysts are pleased by the trajectory of the company’s “Tegra” line of chips for phones and tablets, but weaknes in the traditional PC graphics business has them worried.

There is one downgrades of the stock this morning as far as I can see, by Needham & Co.’s Rajvindra Gill, who cut his rating on the shares to Hold from Buy, and removed his $27 price target.

The core discrete graphics processing unit, or GPU, business is under pressure, Gill avers, leading to pressure on the company’s gross margin. Gill notes that discrete GPU revenues were at $2.5 billion in 2007, went to $1.8 billion in 2010, and may rebound to $2.1 billion this year, with some share gains, but will probably rise only 2% next fiscal year.

Excluding payments from the company’s settlement with Intel (INTC) in January, the “core” gross margin for Nvidia is set to decline by 1.3 percentage points in the current quarter, even though the company forecast gross margin to actually rise from 50.4% in Q1 to a range of 50.5% to 51.5% in Q2. Gill is also concerned about the professional systems business unit of Nvidia, which peaked last July at $215 million, and has been “flatline” ever since. Adoption of some of the company’s more powerful chips, “Tesla” and “Quadro” have been “lackluster.”

Lastly, he worries about the ramp in operating expenses to support the company’s deal announced this week to purchase baseband chip maker Icera.

There’s plenty for both bull and bear to chew on this morning:

Bullish!

Hans Mossesmann, Raymond James: Reiterates a Strong Buy rating and a $40 price target. The momentum for Tegra 2 was “strong,” and inventory levels look to be fairly benign at this point. The forecast for gross margin of as mug as 51.5% is above the 49.5% he was modeling for this quarter, and is a level he hadn’t expected until year end. “Unfortunately some sellside models have been stretching the gross margin line recently and could lead to some confusion or disappointment; however, gross margin up nearly 600 bp y/y is at a remarkable level for NVIDIA given the Street’s historical skepticism of reaching an over 50% level to begin with.”

Bearish!

Craig Ellis, Caris & Co.: Reiterates an “Average” rating. Ellis notes the Q2 outlook reflects a “strong Tegra step-up” in sales. Ellis writes the stock is “rich” at 19 times his projected EPS, and discounting in a “significant” expected gain in notebook graphics. On the other hand, he notes the Tegra revenue increase to $123 million in the quarter, up 78%, was well above his $82 million estimate. He raised his Tegra estimate for Q2 to $171 million from a prior 103 million.